This one is looking very good IMO. Market cap of only around AUD $180 million (undiluted) with after tax NPV of Project USD $1 billion plus. The capital cost, whilst not insignificant at USD 200 million, is doable. Potential for a JV with Alcoa adds to the attraction. And a very good Manager in Roly who under-promises and over-delivers - much better than the other way around (over- promising and under-delivering).
I expect FYI's share price to rerate higher as the market comes to recognise the gulf between the NPV of the Project and FYI's market cap and also comes to the realisation that this is a quality Project that in all likelihood will be developed.
Re comments on this thread re other Projects with very high NPV's with owners having low market caps, usually the reason for this is that these Projects generally have huge upfront capital costs. This means that, whilst the project's NPV may be large, the developer cannot secure the finance to develop, hence the developer languishes, often for years and years, with a low market cap. Examples of this that spring to mind are SFX, AVL and TNG. FYI does not have this issue as our capital cost is manageable IMO.
GLTA & DYOR
FYI Price at posting:
55.5¢ Sentiment: Buy Disclosure: Held
